In June 2026, the sentiment index for China's textile and apparel specialized markets showed subtle shifts: the manager sentiment index edged up 0.43 points to 49.78, while the merchant sentiment index rose 0.34 points to 50.07. On the surface, market confidence is recovering, but a deeper dive into the sub-indices reveals that merchant profitability and pricing power remain in contraction territory, signaling a painful period of 'stable volume but falling prices' for the industry.
Merchant Profitability Under Pressure, Cost and Inventory Diverge
The June data highlights a core contradiction: total market turnover and logistics shipment volumes remained largely flat, but the merchant profitability index (49.86) and average selling price index (49.30) both fell below the 50-point boom-or-bust line. This means that while shipment volumes did not decline significantly, merchants had to cut prices to maintain sales, directly squeezing profit margins. More notably, 18.88% of merchants reported lower selling prices, a surge of 12.03 percentage points from the previous month, indicating intensifying price competition.
At the same time, cost pressures are mounting. 6.99% of merchants reported increased operating costs, up nearly 7 percentage points from last month, dragging the comprehensive cost index down to 50.63. On the inventory front, there were positive signs: the inventory index rebounded to 50.00, and 10.49% of merchants reduced their inventories, up 8.44 percentage points from the previous month, suggesting some success in destocking. The coexistence of rising costs and falling inventories indicates that merchants are actively adjusting their business strategies to cope with shrinking margins.
E-commerce Becomes a Stabilizer, Offline Foot Traffic Recovers
Amid pressure on traditional wholesale business, e-commerce sales emerged as a bright spot in the June data. The manager e-commerce sales index climbed to 51.61, and the merchant e-commerce sales index reached 50.49, both in expansion territory. 22.58% of market managers reported increased e-commerce sales, up 6.45 percentage points from the previous month; the proportion of merchants with increased online sales also rose by 8.42 percentage points. This indicates that more textile and apparel merchants are leveraging online channels as a growth driver rather than relying solely on offline foot traffic.
Offline markets also showed some improvement. In June, the foot traffic index rose by 0.64 points, the store opening rate index increased by 0.32 points, and the rental index stabilized at 50.65. The overall operation of specialized markets improved slightly compared to the previous month, but the recovery momentum remains limited. 77.42% of markets reported stable total turnover, suggesting the market is still in a 'sideways consolidation' phase rather than a strong rebound.
Divergent Expectations: Managers Cautious, Merchants Optimistic
Looking ahead to July, expectations between managers and merchants diverge. The managers' forecast for the next period sentiment index stands at 50.32, down 2.91 points from the previous month, reflecting cautiousness about near-term market activity. In contrast, merchants' forecast for the next period sentiment index rose by 0.70 points to 50.84, indicating growing confidence in the business environment. This divergence may stem from differing perspectives: managers focus on macro market activity, while merchants are closer to end-consumer demand and are more optimistic about the upcoming summer apparel season.
Overall, the June 2026 data for textile and apparel specialized markets reveals a pattern of 'stable aggregate volume with structural divergence.' Sales and foot traffic are recovering, but prices and profits remain low; offline traffic is improving, but e-commerce is growing faster. For industry practitioners, relying solely on traditional wholesale models is becoming increasingly risky. Embracing e-commerce, optimizing cost structures, and adopting flexible pricing strategies have become essential for survival and growth.